With Saudi Arabia and Iran squaring up on opposing sides in the Yemen war, the dangers to vital oil tanker and goods voyages are growing. Millions of barrels of oil pass through the Bab al-Mandab and Strait of Hormuz everyday to Europe, the United States, and Asia, waterways that pass along the coasts of Yemen and Iran, respectively. Saudi-led forces have imposed inspections on all ships entering Yemen in an attempt to prevent weapons being smuggled to the Iran-allied Houthis. Insurance costs for shippers are likely to jump and the likelihood of a sharp rise in the premiums on voyages could be as much a deterrent to trade as the conflict itself. [Reuters, 5/13/2015]

Saudi claims oil price strategy success
Saudi Arabia says its strategy of squeezing high-cost rivals such as US shale producers is succeeding, as the world’s largest crude exporter seeks to reassert itself as the dominant force in the global oil market. The kingdom’s production rose to a record high of 10.3 million barrels a day in April and there is no sign that it plans to reverse its policy at next month’s meeting of the Organization of the Petroleum Exporting Countries (OPEC). The International Energy Agency released data on Wednesday backing up the Saudi position, however the agency also cautioned that it would be “premature” to suggest that OPEC had “won the battle for market share.” [Financial Times, 5/13/2015]

Egypt targets 5 percent growth in 2015/2016 fiscal year
Egypt is targeting 5 to 6 percent average growth in gross domestic product in the next fiscal year 2015/2016, up from an expected 4 percent for the current year, Planning Minister Ashraf al-Araby said. The government is targeting 6 percent growth by fiscal year 2018/2019. Araby said the government’s policy of subsidy cuts would continue but he did not give a breakdown of the intended cuts. Egypt will begin rolling out a smart card system for subsidized fuel starting on June 15 as part of plans to reduce costly energy subsidies over time. Al-Araby said the government would not raise fuel prices immediately once the smart card system comes into force. [Reuters, Ahram Online, 5/13/2015]

Eni’s oil output in Libya rises above pre-war levels
Italy’s oil and gas company Eni is producing around 300,000 barrels per day (bpd) of oil in Libya, raising output higher than the 280,000 bpd that Eni produced before Muammar Qaddafi was ousted in 2011. Eni, Libya’s biggest oil producer, is one of the few foreign companies still operating in the country. Meanwhile, the ports at Zueitina and Hariqa remain the main outlets for oil exports. So far, all the crude oil leaving Zueitina is from storage as fresh supplies are currently blocked by protesters demanding jobs. [Bloomberg, Libya Monitor (subscription), 5/13/2015]

Also of interest
Weaker oil may stall Gulf’s advance, Q1 earnings mixed | Reuters
Saudis spend like there’s no oil price drop | Financial Times
Iraqi forces capture three strategic areas in Baiji | Rudaw
The role of Egypt’s central bank (analysis) | Al Monitor